ACIT, New Delhi V. M/s. Benchmark Circuits India Pvt. Ltd., New Delhi

ITA 817/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61616 (ITAT-DELHI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 17-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K UPADHYAYDR
• Keywords: Additional evidence; Assessment record
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI A BENC H BEFORE SHRI U.B.S. BEDI, JM & SHRI A.N. PAHUJA, A M ITA NO.817/DEL/2012 ASSESSMENT YEAR:2007-08 ASSISTANT CIT, CENTRAL CIRCLE-9, ROOM NO. 353, ARA CENTRE,E- 2,JHANDEWALAN EXTENSION, NEW DELHI V/S . M/S BENCHMARK CIRCUITS INDIA PVT. LTD., A-42, GATE NO.3, 1 ST FLOOR, PHASE-II, MAYAPURI, INDUSTRIAL AREA, NEW DELHI-64 [PAN :AACCB 6698 N] (APPELLANT) (RESPONDENT) ASSESSEE BY NONE REVENUE BY SHRI S.K. UPADHYAY,DR DATE OF HEARING 18-04-2012 DATE OF PRONOUNCEMENT 18-04-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 17.02.2012 BY THE REVENUE AGAI NST AN ORDER DATED 21.11.2011 OF THE LEARNED CIT(A)-V, NEW DELHI , RAISES THE FOLLOWING GROUNDS:- 1. THAT THE CIT(A) ERRED IN LAW AND ON THE FACTS O F THE CASE IN DELETING THE ADDITION OF ` ` 6,81,247/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE IN PURCHASE AND SALE AS PER PROFIT AND LOSS AC SUBMITT ED TO THE DEPARTMENT AND THE SAME SUBMITTED TO THE ASSESSEE BANKER. 2. THAT THE CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE ADDITION OF ` `3,87,502/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF EXPENSES DUE TO NON DEDUCTION OF TDS ON THEM. 3. (A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. ITA NO.817/DEL./2012 2 (B) THE APPELLANT CRAVES TO ADD, ALTER OR AMEND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING T HE COURSE OF THE HEARING OF THE APPEAL. 2. AT THE OUTSET, NONE APPEARED BEFORE US ON BEHAL F OF THE ASSESSEE NOR ANY REQUEST FOR ADJOURNMENT HAS BEEN FILED. CON SIDERING THE NATURE OF ISSUES, THE BENCH DECIDED TO DISPOSE OF THE APPEAL AFTER HE ARING THE LD. DR. 3 FACTS IN BRIEF, AS PER RELEVANT ORDERS ARE THAT R ETURN DECLARING LOSS OF ` ` 71,62,242/- FILED ON 28.10.2007 BY THE ASSESSEE, WA S SELECTED FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE INCOME-T AX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT), ISSUED ON 15.09.2008. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (A.O. IN SHORT) ISSUED A NOTICE U/S 133(6) OF THE ACT, SEEKING INFORMATION FROM UNION BANK OF IND IA IN RELATION TO DETAILS OF THE BANKING FACILITIES SANCTIONED TO THE ASSESSEE COMPA NY, DETAILS OF THE STOCK STATEMENT SUBMITTED TO IT AND SECURITY OFFERED FOR THE CREDIT FACILITIES SANCTIONED TO THE ASSESSEE. ON COMPARISON OF DETAILS SUBMITTED B Y THE BANK VIS--VIS AUDITED ACCOUNTS & THOSE DECLARED IN VAT RETURN, THE AO NOT ICED FOLLOWING DISCREPANCIES :- {IN ` ] PARTICULARS AS PER P&LA/C AS PER VAT RETUR N AS PER BANK STATEMENT PURCHASE 2,05,46,136 2,30,43,242 2,59,50,314 SALE 1,26,72,017 1,47,84,457 1,87,57,442 STOCK 1,11,93,970 67,81,833 SINCE THE ASSESSEE DID NOT RECONCILE THE PURCHASE, SALE AND STOCK REFLECTED IN THE BANK STATEMENT OR VAT RETURN VIS-A-VIS PROFIT A ND LOSS ACCOUNT, THE AO ADDED AN AMOUNT OF ` `6,81,247/- TO THE TOTAL INCOME. 4 ON APPEAL, THE LD.CIT(A) AFTER HAVING A REMAND R EPORT FROM THE AO ON THE ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSE E AND CONSIDERING THE FACT ITA NO.817/DEL./2012 3 THAT STOCK WAS ONLY HYPOTHECATED TO THE BANK WHILE STOCK STATEMENTS TO BANKERS WERE SUBMITTED ONLY FOR BROKEN PERIODS VIZ.1.12.200 6 TO 23.1.2007;1.1.2007 TO 10.2.2007;11.2.2007 & MARCH,2007, CONCLUDED AS UNDE R:- 4.4 I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT O RDER, THE WRITTEN SUBMISSION OF THE APPELLANT AS WELL AS THE REMAND REPORT, THE REJOINDER TO THE REMAND REPORT AS WELL AS THE A SSESSMENT RECORD WHICH WAS REQUISITIONED DURING THE COURSE OF HEARIN G IN ORDER TO VERIFY THE CONTENTIONS OF THE APPELLANT. ON PERUSA L OF THE ASSESSMENT RECORD IT IS EVIDENT THAT AFTER COLLECTI ON OF THE INFORMATION FROM BANK, NO OPPORTUNITY WAS GIVEN TO THE APPELLANT FOR EXPLAINING THE DISCREPANCIES. IT IS ALSO SEEN THAT THE ASSESSEE HAS RESPONDED TO THE QUERY OF ASSESSING OFFICER FOR REC ONCILIATION DATED 20.11.09 AND SUBMITTED LETTER DATED 10.12.09. THE QUERY AS WELL AS THE REPLY HAS BEEN QUOTED IN THE REJOINDER SUBMITTE D BY THE APPELLANT TO THE REMAND REPORT, HENCE THE SAME IS N OT REPEATED AGAIN. THEREFORE, THE ASSESSING OFFICERS ALLEGATI ON THAT NO SUBMISSION WAS FILED WHEN THE ASSESSEE WAS ASKED TO EXPLAIN THE DIFFERENCE IS NOT FOUND TO BE CORRECT. AFTER THE D OCUMENTS WERE COLLECTED FROM BANK, THE SAME WAS NOT CONFRONTED AN D IN MY VIEW, SUFFICIENT OPPORTUNITY WAS NOT PROVIDED TO THE ASSE SSEE DURING THE ASSESSMENT STAGE, THE ADDITIONAL EVIDENCES FILED AR E BEING ADMITTED. 4.5 ON GOING THROUGH THE STATEMENTS GIVEN BY THE BANK, AS CLAIMED BY THE APPELLANT, IT IS SEEN THAT THEY ARE FOR DIFFERENT PERIODS AND FOR OVERLAPPING PERIODS AND THEREFORE F IGURES WERE TAKEN TWICE BY THE ASSESSING OFFICER AS IS EVIDENT FROM THE RECONCILIATION FILED. I ALSO FIND THE ASSERTION OF THE APPELLANT CORRECT THAT THE ASSESSING OFFICER HAS TAKEN THE FIGURES OF P&L ACCOUNT NOT ONLY FROM SCHEDULE J BUT FROM VARIOUS OTHER PLACES. MOREOVER, THE ASSESSING OFFICER WAS TRYING TO COMPARE THE VALUES OF SALES AND PURCHASE IN FINANCIAL STATEMENTS WITH THE QUANTITIE S IN THE TAX AUDIT REPORT, WHICH THE ASSESSEE IN ITS REPLY DATED 10.12 .2009 HAS POINTED OUT BUT HAS NOT BEEN TAKEN COGNIZANCE OF BY THE ASSESSING OFFICER. THE ASSESSING OFFICER IN THE REMAND REPORT HAS NOT GIVEN ANY COMMENTS ON THE RECONCILIATION OF SALES SUBMITT ED BY THE APPELLANT DURING REMAND PROCEEDINGS. THE RECONCILI ATION OF SALES IS AS UNDER: SALES RECONCILIATION ITA NO.817/DEL./2012 4 S.NO. DATE OF WHICH SUBMISSION OF STATEMENT TO BANKER PERIOD TAKEN IN STATEMENT SUBMITTED TO BANKER SALES VALUE AS PER STATEMENT SUBMITTED TO BANKER [IN ` ] SALES AMOUNT AS PER BOOKS OF ACCOUNTS [IN ` ] DIFFERENCE AMOUNT AFTER REDUCING [IN ` ] REASONS FOR DIFFERENCE\ [IN ` ] 1 24.1.07 1.12.06 TO 31.12.06 1.1.07 TO 23.1.07 51,06,252 22,87,601 19,76,201 8,42,450 1. EXCISE DUTY AMOUNT 682208 AND VAT AMT. 198386 WRONGLY INCLUDED IN SALE WHILE SUBMITTING TO BANKER IN THE BANK STATEMENT (682208+198386=880594) LEDGER ACCOUNT ENCLOSED. 2.MINOR ERROR OF `38144 BY ACCOUNTANT IN STATEMENTS SUBMITTED TO BANKER. 2 12.2.07 1.1.07 TO 23.1.07 24.1.07 TO 31.1.07 1.2.07 TO 10.2.07 44,24,838 19,76,201 1,58,000 15,43,792 7,46,845 1.EXCISE DUTY AMOUNT 588478 AND VAT AMT. 171130 WRONGLY INCLUDED IN SALES WHILE SUBMITTING TO BANKER IN THE BANK STATEMENT (588478+171130=759608) 2. `1976201 INCLUDED AGAIN FOR THE PERIOD FROM 1.1.07 TO 23.1.07 IN THE STATEMENT SUBMITTED TO THE BANKER. 3. MINOR ERROR OF `12763 BY THE ACCOUNTANT IN STATEMENTS SUBMITTED TO BANKER. 3 21.3.07 TO 20.3.07 11.2.07 TO 28.2.07 1.3.07 TO 20.3.07 53,00,077 28,51,048 24,45,005 4024 1. MINOR ERROR BY ACCOUNTANT IN STATEMENTS SUBMITTED TO BANKER 4 7.7.07 21.3.07 TO 20.3.07 21.3.07 39,26,275 24,45,005 14,10,370 70,900 1. JOB WORK AMOUNT INCLUDED IN STATEMENT SUBMITTED TO THE BANKER SUM OF `70,900/- SUPPORT DOCUMENT ENCLD. PHOTO COPY OF JOB WORK BILL ENCLD. 2. `2445005 INCLUDED AGAIN FOR THE PERIOD FROM 1.3.07 TO 31.3.07 IN THE STATEMENT SUBMITTED TO THE BANKER. TOTAL 1,87,57,442 1,26,72,017 ITA NO.817/DEL./2012 5 AFTER GOING THROUGH THE RECONCILIATION STATEMENT, EXCISE RECORDS ETC., I FIND THAT FIGURES FOR SALES AND PURCHASES STAND RECONCILED AN D THEREFORE THE ADDITION WITHOUT PROPER BASIS IS NOT JUSTIFIED AND THE ADDIT ION IS DELETED. 5. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF LEARNED CIT(A).THE LD. DR MERELY SUPPOR TED THE FINDINGS OF THE AO 6. WE HAVE HEARD THE LD. DR AND GONE THROUGH THE FA CTS OF THE CASE. WE FIND THAT THE LD. CIT(A) AFTER CONSIDERING THE FIND INGS OF THE AO IN THE REMAND REPORT ON ADDITIONAL EVIDENCE SUBMITTED BY THE ASSE SSEE AND FACTS AVAILABLE ON ASSESSMENT RECORDS AND RECONCILIATION OF SALES SUBM ITTED BY THE ASSESSEE DURING THE REMAND PROCEEDINGS, CONCLUDED THAT SALES AND PU RCHASES STOOD RECONCILED AND, THEREFORE, ADDITION WAS WITHOUT ANY BASIS. SIN CE THE LD. DR APPEARING BEFORE US DID NOT REFER US TO TAKE ANY MATERIAL CONTROVERT ING THE AFORESAID FINDINGS OF FACTS RECORDED BY THE LD. CIT(A) SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER, WE HAVE NO BASIS TO INTERFERE. CONSEQUENTL Y, GROUND NO.1 IN THE APPEAL IS DISMISSED. 7.. GROUND NO.2 IN THE APPEAL RELATES TO DISALLOWA NCE OF EXPENSES OF ` ` 3,78,502/- ON ACCOUNT OF NON DEDUCTION OF TAX AT SOURCE. THE AO ON PERUSAL OF TAX AUDIT REPORT DISALLOWED, INTER ALIA, AN AMOU NT OF ` 3,78,502/- DUE TO NON DEDUCTION OF TAX AT SOURCE THEREON. 8. ON APPEAL, THE LD. CIT(A) AFTER HAVING A REMAND REPORT FROM THE AO AND CONSIDERING THE FACT THAT THE AMOUNT OF ` ` 3,78,502/- WAS ALREADY INCLUDED IN THE AMOUNT OF ` `7,22,637/- OFFERED FOR DISALLOWANCE U/S 40A(IA) OF THE ACT , IN TERMS OF PARA 27 OF THE TAX AUDIT REPORT IN FORM NO .3CD, DELETED THE DISALLOWANCE . ITA NO.817/DEL./2012 6 9. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A).THE LD. DR MERELY SUPPOR TED THE ORDER OF THE AO. 10. WE HAVE HEARD THE LD. DR AND GONE THROUGH THE FACTS OF THE CASE. INDISPUTABLY, THE AMOUNT OF ` ` 3,78,502/- DISALLOWED BY THE AO ON THE BASIS OF TAX AUDIT REPORT WAS ALREADY INCLUDED IN THE AMOUNT OF ` ` 7,22,632/- OFFERED BY THE ASSESSEE FOR DISALLOWANCE U/S 40A(IA) OF THE ACT. SINCE THE LD. DR DID NOT DISPUTE THIS FACT NOR PLACED BEFORE US ANY MATERIA L CONTROVERTING THE FINDINGS OF LD. CIT(A), WE ARE NOT INCLINED TO INTERFERE. THERE FORE, GROUND NO.2 IN THE APPEAL IS ALSO DISMISSED. 11.. GROUND NO.3(A) IN THE APPEAL BEING GENERAL IN NATURE, DOES NOT REQUIRE ANY SEPARATE ADJUDICATION WHILE NO ADDITION AL GROUND HAVING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND NO.3(B) IN T HE APPEAL, ACCORDINGLY, THESE GROUNDS ARE DISMISSED. NO OTHER PLEA OR ARGUMENT WA S RAISED BEFORE US. 12.. IN RESULT, APPEAL IS DISMISSED. SD/- SD/- (U.B.S. BEDI) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NS COPY OF THE ORDER FORWARDED TO :- 1. ASSTT. CIT, CENTRAL CIRCLE -9, NEW DELHI. 2. M/S BENCHMARK CIRCUITS INDIA PVT. LTD., A-42, GA TE NO.3 1 ST FLOOR, PHASE-II, MAYAPURI INDL. AREA, NEW DELHI-64 . 3. CIT CONCERNED. 4. CIT(A)-V,NEW DELHI 5. DR, ITAT,A BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI ORDER PRONOUNCED IN OPEN COURT